The Common Mistake Every Smart Trader Makes

Hi, Brian McAvoy here with Inside Out Trading. Today we're going to talk about actually, something's really cool. It's a phenomenon that a lot of people run into, especially traders, really common with traders. And it can be making things difficult for you, can be creating problems, but it's like not obvious at all. It's one where you kind of have to have somebody come along and say, hey, this may be what's going on and you might want to have a look at it. Here's what I'm talking about. I'll start just with a little bit of a story. When I was a young father back in my 20s and my daughter was little, I would read to her every night. And it was cool because being the first time dad, it was real important that I raise a riot, get a reading early on. I wanted her to be, of course, intelligent, do well in school and everything. And so I went and I went to the library and I don't remember exactly how I ran across it, but I ran across this book and it was called Learning how to Learn. And it talked about three specific obstacles to learning that, interestingly, they're distinct and they have. They also have a physiological response to each of them. If you run into this, there's a feeling you'll run into in your body as well as in your head, and it's something you can physically feel. There will be a physical reaction. It's pretty cool. Now, the one that traders run into is. And it really. It can make things difficult, mental processing wise and mentally functioning wise. This is why it's such a huge thing. The first obstacle was it has to do with trading. But we want to talk about the second one that he was talking about. And with this one, he referred to it as jumping ahead on the gradient. And it's when you have subject matter and there is a progression to what's involved in that body of knowledge. For example, let's say you wanted to teach somebody mathematics. Well, the first thing you have to do is teach them numbers and how to count. And from there then you can move to addition and basic arithmetic, addition and subtraction. And only when you get those can you move on to multiplication and division and then your higher math and that kind of stuff. And the thing is, if you weren't really taught how to count, right, or maybe you didn't learn it, you know, so you weren't taught addition the right way or for whatever reason, you didn't get it, man. When you get to multiplication and division, these things that are A little higher up. It can be really rough or especially if you try to skip something that maybe. Here's a really good example. And I got to witness this firsthand, this phenomenon, I mean, of course with my daughter, but I also got to witness it with somebody else and how they dealt with it. When I was in Cal 2, I had this instructor, Mr. Cunningham, super smart guy. I loved. He was such an awesome math teacher because so many people struggle with math. And he really illustrated how to approach this particular phenomena. If this is what you're running into with in calculus, maybe you've had calculus. You know, there are certain concepts that you run into. You have differential equations, you have integrals. And with every conceptual area, there's like a base concept. And then you'll get deeper into it. So you'll get go through different levels, little different nuances of those particular concepts. And what was really cool with Mr. Cunningham, 100% of the time, if somebody got stuck somewhere, he was able to get them unstuck 100% of the time every single time he was able to get people unstuck. And so he'd helped me a couple of times or something. But I also got to watch him working with this one kid. And it was really cool because the kid was stuck out here. Like for sake a conversation, let's say he was out here at level E with differential equations. Well, and that's where he was stuck in a man, he just couldn't seem to work past it. Well, Mr. Cunningham didn't go and start talking at level E. He took him back to the very base concept and made sure he understood that. Then he went to level A, made sure he understood that. Level B, made sure he understood that. Level C. Oh, this is actually where he got stuck. And so he got him okay there. Then he moved on to level D. He's okay there. Now he gets back out to level E. Oh, yeah, okay, got it. And it was so cool. But the thing is with trade as traders and where this is applicable as far as trading, it's so easy to dismiss the fact that there are foundational skills to being a trader. It's real easy to look at trading and say, oh, I get it, I see how it works. Sure, I can do that. I know what I'm supposed to do. Let my winners run, Keep my loser short. Follow my rules. Simple. No, this is a skill based occupation and there are a variety of nuances to it, different areas of knowledge that you need to have, a range of skill sets that you need to have. And it's super easy to. And I was guilty of it too. So I don't feel I'm looking down my nose at anybody. I'm not judging anybody. I did this too. It's really easy to look at trading, and because traders tend to be smarter than average, look at it and say, oh, yeah, I get it. And you can just jump right into it. And we have a tendency to not get the basics. And so we jump out here at. Even if we just go straight to amateur trading. But we're not really starting off learning the basics, getting that good foundation before we start trading with real money. Now we've jumped ahead and heaven forbid we try to jump straight to discretionary trading, which is really like intermediate trading. A lot of people love jumping straight to options, which is. It is more sophisticated than just basic trading stocks or futures and that kind of stuff. So. But we have a tendency to jump ahead on the learning curve, and we don't start with, again, that good foundation, learn all the basic skills, learn the vocabulary, learn how things work and build on that foundation and work our way up the progression, up the gradient. It's really easy for us to jump ahead and then wonder why we're kind of struggling. Things are. They're not so easy to get our head around and we're looking at stuff and it's like, why isn't that working the way I expect it to? Why do I keep running into this? Those are the kind of questions that let you know, wow, maybe, yeah, I missed something along the way. Maybe I skipped a step, maybe on my way to calculus. Yeah, I kind of skipped trigonometry and algebra. Wow, Calculus is so freaking hard. Oh, wait a minute. If you got algebra and trig, calculus is not that tough. If you struggle with algebra, calculus can be rough. So again, if you skip ahead or you don't attend to every level as you go, making sure that you do have a good, deep understanding, you do develop the skills that you need. You pick up the range of skills, not just placing trades, and you work your way up to a level of proficiency. Trading is not that tough. It does not have to be a big emotional ride. There are so many occupations the traders are in outside of trading and those other occupations. You probably experience this yourself. Had a lot of traders come to me and I want to be talking to them, and it's like, what do you do? Well, I'm a project manager. I'm a software engineer. I run my own business. Those jobs are way more sophisticated and require a much broader knowledge base. Than trading does. But you're able to go every day, you're able to go to work and you handle your job just fine. Does it have a challenge? Sure. But you deal with without a problem. It's not this big emotional ride. We're having to fight your emotions and be more, be more disciplined and not do stupid stuff. No, you don't have those problems. You just do your job. And trading is the same way. When you attend to it, education wise, development wise, when you attend to it properly, you go through the proper progression. You get that good foundation to start with, then you work your way forward. It really is no more difficult nor, nor emotional than a regular job. And that's exactly how it should be. So if you find that trading is more difficult than it needs to be, it's stressful. You're fighting your emotions all the time. You want to go through. You make money, hand it back. You make money, hand it back. Those are signs that there's something missing in your training to be a trader. You need to really what you need to do is get that, make sure you got that foundation. And if you're missing anything in that good foundation of skills and knowledge that you attend to that. And then when you come back to your regular trading, it's going to be so much easier. So if you'd like to discuss this further, like I said, if your trading isn't going the way you'd like, book a call with me up here inside out trading.com and we'll talk about what's going on with your trading, what you're running into and what likely are the gaps that you need to fill the box in your foundation. And let's attend to it so that trading becomes easy and it becomes fun and profitable and it's working the way you want it to, it, it becomes what you wanted all along. So I hope this been helpful. If it has, give me a like and a subscribe down below. Share with your friends. If you want to swing by the site, I also have some free resources for you. Good training checklist, some videos, all that kind of podcasts, all that kind of stuff. So swing by Inside Out Trading.com, book a call, pick up some freebies. I'm here to help you make your trading better, help you become the trader that you know you need to be to have this work the way you want in your life. So hope this been helpful. We'll talk to you soon. Cheers.